This has so many similarities to CYDY, though it was a help in understanding the short manipulation and disinformation from the other side.
Seeking Alpha posted a commentary this morning on SAVA that was the best summary up to date.
Cassava Sciences' Simufilam Could Be Approved Before The End Of 2022
Sep. 29, 2021 10:47 AM ET Cassava Sciences, Inc. (SAVA) 4 Comments1 Like
SummaryCassava Sciences Alzheimer's treatment has proven to not only slow down but also reverse cognition degeneration in Alzheimer's patients leaving the door open for early approval.Concerns existed on a possible placebo effect but recently presented 12-month data put those concerns aside and furthermore opened the door for FDA fast track approval or breakthrough designation.Massive 21% short interest could help propel a rally higher in the next couple of weeks and months.Management has hinted a possible partnership agreement is in the works.
koto_feja/E+ via Getty Images Few stocks have been so full of controversy as that of Cassava Sciences ( SAVA). Over the last two months, investors have been on a rollercoaster of emotions. A group of very sophisticated and smart short investors was able to massively profit from a coordinated short attack on the company and the subsequent fall on the stock. This has presented one of the best investing windows to grab shares of Cassava Sciences with a significantly derisked profile after spectacular 12-month data was presented on September 22, 2021.
As seen on the chart below, shorts were accumulating a short position as the company was making new highs (there's a 2-week delay on the data so what's seen here is a massive accumulation that was reported after the drop). Most likely, shorts were wrong about the 9-month data presented in July and therefore had to resort to some borderline illegal tactics to smear the company and its lead research scientist. There were accusations of data manipulation and a hint at massive company fraud. Many institutional investors have bylaws that require them to sell if a company could potentially be engaged in fraudulent behavior and shorts knew this.
Data by YCharts In my 16 years of investing, the only other time where I have seen this level of fearmongering in a company has been in the 2008 crisis. Back then, short positions were created in financial institutions. Then shorts would circulate rumors of insolvency to the media. Massive naked shorting would occur on the bonds and stock of a company and it would create an illusion of an investor panic which could then be reported upon. Then, if it was a bank, customers would rush to withdraw money and the collapse would become a self-fulfilling prophecy.
Lucky for us, Cassava Sciences has no need to raise capital so the drop in the stock price won't affect the ability of the company to conduct the crucial Placebo-Controlled Phase 3 trials. Here we have a gasoline fire that has created a lot of noise and heat but it will consume very quickly because there's no long-term combustible material in it. Shares have already rallied more than 50% from their recent lows and they could go back to their $120's as they were back in July when one of the following catalysts come to fruition:1) The identity of the shorts is identified.
2) CUNY school of medicine finishes its internal investigation and clears Prof. Wang of any wrongdoing.
3) Phase 3 trials officially start.
4) The FDA comments on the Citizen's Petition
5) A partnership announcement is announced.
The Actors of the Short Attack There's great speculation about who could have potentially filed the Citizen's petition and even took the liberty of hiring a very sophisticated Labaton Sucharow lawyer, Jordan A. Thomas, whose only purpose was to add fear and credibility to the attack. By hiring Jordan A. Thomas (a former SEC prosecutor who handled whistleblower complaints and a former Department of Justice Trial Attorney) shorts were able to add substantial credibility to the FDA Citizen Petition. However, the supposed "whistleblowers" - as referenced multiple times online - are only a group of scientists colluding with big money who have a short position on the stock. These aren't employees of the company who saw illegal behavior at Cassava Sciences and therefore wanted to protect patients from harmful drugs. Instead, these are short-sellers working to create doubt around a company with the sole purpose of making a profit at the expense of Alzheimer's patients.
It's not uncommon for biotech companies to have a high degree of short-sellers always hanging around their shares waiting for more dilution or bad news to happen. It's all fair game in the stock market. But what short-sellers have done at Cassava Sciences is just totally and completely distasteful while the families of 6.2 million Americans are waiting for any kind of treatment that offers hope for their loved ones. I am all for justice but the Citizen Petition was nothing short of a dump and cover short selling scam which I hope is eventually prosecuted by the SEC! In the company's response, the following quote is worth mentioning:
But I think what we're currently seeing is no ordinary short seller betting our data will disappoint. To me, the short attack against Cassava Sciences feels unprecedented in its boldness, its scope, its immediacy and its intensity. It feels highly organized and well-funded. It feels like whoever is behind this effort wants to make a lot of money quickly, at the expense of our science. And, of course, by hiring a law firm to spread allegations on-line, the holders of a short position don't have to do the dirty work. That's done by the law firm. In other words, by distancing the monkey from the organ grinder, those behind this scheme are hard to detect.
Remi Barbier - CEO of Cassava Sciences
Dissecting the Truth The Citizen Petition isn't questioning the current data presented by Cassava Sciences that has shown that the gold standard of cognition is not only slowed down by Simufilam but actually it's reversed to show an improvement of 3.2 points on the ADAS-Cog11 chart. Though how long the effects of Simufilam will last is a question that we still need an answer to, it's becoming evident that the FDA could give shorts a black eye if it responds to the Citizen Petition with a breakthrough designation or an Emergency Use authorization while the company completes phase 3 trials. There could be countless volunteers who could ask for Simufilam on a compassionate use basis. Historically, breakthrough designation status is given before the beginning of Phase 3 trials. Given that 12-month Simufilam data became available a month after a protocol Phase 3 agreement with the FDA - the breakthrough designation could still be on tap and even if Phase 3 trials start the FDA could still decide to put that label on if the company were to request it.
The FDA could be compelled to protect Cassava Sciences as it would show that it's giving priority to Alzheimer's disease research and not to a particular company after Biogen's highly questionable Aducanumab approval. The Cassava Sciences debacle could give the FDA a cover for how it's treating Alzheimer's disease and the bar for approval. It's true that something desperately needs to be done for Alzheimer's patients. Furthermore, the FDA could frown that short-sellers are using the Citizen Petition mechanism as a nuclear weapon and react with a nuclear weapon of their own.
Biogen's drug was granted accelerated approval with less than spectacular data and serious side effects. With the kind of data seen on Simufilam and its safety profile, I would put the chances of breakthrough designation or early approval at 95%. Though the current phase 3 trials are a two-arm controlled study we could see an early conditional approval of Simufilam if a 6-month or 9-month interim data readout shows the same results with a Placebo-controlled group. Officially, the Phase 3 study involves a 12-month and an 18-month group. In this case, interim data or the 12-month data could be enough for the FDA to greenlight Simufilam for commercialization based on the significant progress shown on Phase 2 data in patients. This leaves the door open for the approval of Simufilam in Q4 of 2022.
Just like Moderna was trading a year ago at $20 per share and there were law firms chasing them for misleading claims, I believe that Cassava Sciences two years from now could be trading for over $700 per share upon approval. There's nothing even remotely close to what Simufilam and SavaDx have shown on clinical trials. The data in question is from mice clinical trials and not the most recent open-label data. The risk-reward here can't be ignored.
The risk on this investment is basically that the FDA takes a harder approach on Cassava Sciences for approval to Simufilam to make up for the lax approval of Aducanumab.
Conclusion There are several articles on Seeking Alpha that dissect the Citizen petition and the 9-month data as well as the valuation potential of the company. I tried to avoid repeating their points but feel free to browse the work of fellow contributors in your due diligence pursuit. However, I believe that you don't have to be a genius to see that the people behind the short attack don't have the best interest of the Alzheimer patients at heart. Berkeley Lights ( BLI) was recently subject to the same type of attack. Oftentimes, these attacks create a lot of noise but once they settle companies go back to trading on fundamentals. Did Cassava Sciences make mistakes in how the data was presented? Yes, there's no doubt about it. If you go back and you check my University Papers from 10 years ago in finance you will probably find a lot of errors too. But that doesn't change that the most recent third-party verified Simufilam data is real and that it works. It also doesn't change the fact that the FDA and the government are desperate to address this unmet need and will likely end up accelerating the approval of Simufilam.
Cassava Sciences is now more likely than ever before to partner up with another big pharmaceutical company to add credibility to their work and it was hinted on their Q2 quarterly conference call that an announcement in this regard was incoming.
I was able to load up some shares close to the bottom and I am beyond excited about the risk-reward in here.
As a final disclosure, I would like to add that Cassava Sciences' CEO was involved in litigation at Pain Therapeutics after the FDA failed to approve their drug candidate. The case was settled without admission of wrongdoing.
Seeking Alpha posted a commentary this morning on SAVA that was the best summary up to date.
Cassava Sciences' Simufilam Could Be Approved Before The End Of 2022
Sep. 29, 2021 10:47 AM ET Cassava Sciences, Inc. (SAVA) 4 Comments1 Like
SummaryCassava Sciences Alzheimer's treatment has proven to not only slow down but also reverse cognition degeneration in Alzheimer's patients leaving the door open for early approval.Concerns existed on a possible placebo effect but recently presented 12-month data put those concerns aside and furthermore opened the door for FDA fast track approval or breakthrough designation.Massive 21% short interest could help propel a rally higher in the next couple of weeks and months.Management has hinted a possible partnership agreement is in the works.
koto_feja/E+ via Getty Images Few stocks have been so full of controversy as that of Cassava Sciences ( SAVA). Over the last two months, investors have been on a rollercoaster of emotions. A group of very sophisticated and smart short investors was able to massively profit from a coordinated short attack on the company and the subsequent fall on the stock. This has presented one of the best investing windows to grab shares of Cassava Sciences with a significantly derisked profile after spectacular 12-month data was presented on September 22, 2021.
As seen on the chart below, shorts were accumulating a short position as the company was making new highs (there's a 2-week delay on the data so what's seen here is a massive accumulation that was reported after the drop). Most likely, shorts were wrong about the 9-month data presented in July and therefore had to resort to some borderline illegal tactics to smear the company and its lead research scientist. There were accusations of data manipulation and a hint at massive company fraud. Many institutional investors have bylaws that require them to sell if a company could potentially be engaged in fraudulent behavior and shorts knew this.
Data by YCharts In my 16 years of investing, the only other time where I have seen this level of fearmongering in a company has been in the 2008 crisis. Back then, short positions were created in financial institutions. Then shorts would circulate rumors of insolvency to the media. Massive naked shorting would occur on the bonds and stock of a company and it would create an illusion of an investor panic which could then be reported upon. Then, if it was a bank, customers would rush to withdraw money and the collapse would become a self-fulfilling prophecy.
Lucky for us, Cassava Sciences has no need to raise capital so the drop in the stock price won't affect the ability of the company to conduct the crucial Placebo-Controlled Phase 3 trials. Here we have a gasoline fire that has created a lot of noise and heat but it will consume very quickly because there's no long-term combustible material in it. Shares have already rallied more than 50% from their recent lows and they could go back to their $120's as they were back in July when one of the following catalysts come to fruition:1) The identity of the shorts is identified.
2) CUNY school of medicine finishes its internal investigation and clears Prof. Wang of any wrongdoing.
3) Phase 3 trials officially start.
4) The FDA comments on the Citizen's Petition
5) A partnership announcement is announced.
The Actors of the Short Attack There's great speculation about who could have potentially filed the Citizen's petition and even took the liberty of hiring a very sophisticated Labaton Sucharow lawyer, Jordan A. Thomas, whose only purpose was to add fear and credibility to the attack. By hiring Jordan A. Thomas (a former SEC prosecutor who handled whistleblower complaints and a former Department of Justice Trial Attorney) shorts were able to add substantial credibility to the FDA Citizen Petition. However, the supposed "whistleblowers" - as referenced multiple times online - are only a group of scientists colluding with big money who have a short position on the stock. These aren't employees of the company who saw illegal behavior at Cassava Sciences and therefore wanted to protect patients from harmful drugs. Instead, these are short-sellers working to create doubt around a company with the sole purpose of making a profit at the expense of Alzheimer's patients.
It's not uncommon for biotech companies to have a high degree of short-sellers always hanging around their shares waiting for more dilution or bad news to happen. It's all fair game in the stock market. But what short-sellers have done at Cassava Sciences is just totally and completely distasteful while the families of 6.2 million Americans are waiting for any kind of treatment that offers hope for their loved ones. I am all for justice but the Citizen Petition was nothing short of a dump and cover short selling scam which I hope is eventually prosecuted by the SEC! In the company's response, the following quote is worth mentioning:
But I think what we're currently seeing is no ordinary short seller betting our data will disappoint. To me, the short attack against Cassava Sciences feels unprecedented in its boldness, its scope, its immediacy and its intensity. It feels highly organized and well-funded. It feels like whoever is behind this effort wants to make a lot of money quickly, at the expense of our science. And, of course, by hiring a law firm to spread allegations on-line, the holders of a short position don't have to do the dirty work. That's done by the law firm. In other words, by distancing the monkey from the organ grinder, those behind this scheme are hard to detect.
Remi Barbier - CEO of Cassava Sciences
Dissecting the Truth The Citizen Petition isn't questioning the current data presented by Cassava Sciences that has shown that the gold standard of cognition is not only slowed down by Simufilam but actually it's reversed to show an improvement of 3.2 points on the ADAS-Cog11 chart. Though how long the effects of Simufilam will last is a question that we still need an answer to, it's becoming evident that the FDA could give shorts a black eye if it responds to the Citizen Petition with a breakthrough designation or an Emergency Use authorization while the company completes phase 3 trials. There could be countless volunteers who could ask for Simufilam on a compassionate use basis. Historically, breakthrough designation status is given before the beginning of Phase 3 trials. Given that 12-month Simufilam data became available a month after a protocol Phase 3 agreement with the FDA - the breakthrough designation could still be on tap and even if Phase 3 trials start the FDA could still decide to put that label on if the company were to request it.
The FDA could be compelled to protect Cassava Sciences as it would show that it's giving priority to Alzheimer's disease research and not to a particular company after Biogen's highly questionable Aducanumab approval. The Cassava Sciences debacle could give the FDA a cover for how it's treating Alzheimer's disease and the bar for approval. It's true that something desperately needs to be done for Alzheimer's patients. Furthermore, the FDA could frown that short-sellers are using the Citizen Petition mechanism as a nuclear weapon and react with a nuclear weapon of their own.
Biogen's drug was granted accelerated approval with less than spectacular data and serious side effects. With the kind of data seen on Simufilam and its safety profile, I would put the chances of breakthrough designation or early approval at 95%. Though the current phase 3 trials are a two-arm controlled study we could see an early conditional approval of Simufilam if a 6-month or 9-month interim data readout shows the same results with a Placebo-controlled group. Officially, the Phase 3 study involves a 12-month and an 18-month group. In this case, interim data or the 12-month data could be enough for the FDA to greenlight Simufilam for commercialization based on the significant progress shown on Phase 2 data in patients. This leaves the door open for the approval of Simufilam in Q4 of 2022.
Just like Moderna was trading a year ago at $20 per share and there were law firms chasing them for misleading claims, I believe that Cassava Sciences two years from now could be trading for over $700 per share upon approval. There's nothing even remotely close to what Simufilam and SavaDx have shown on clinical trials. The data in question is from mice clinical trials and not the most recent open-label data. The risk-reward here can't be ignored.
The risk on this investment is basically that the FDA takes a harder approach on Cassava Sciences for approval to Simufilam to make up for the lax approval of Aducanumab.
Conclusion There are several articles on Seeking Alpha that dissect the Citizen petition and the 9-month data as well as the valuation potential of the company. I tried to avoid repeating their points but feel free to browse the work of fellow contributors in your due diligence pursuit. However, I believe that you don't have to be a genius to see that the people behind the short attack don't have the best interest of the Alzheimer patients at heart. Berkeley Lights ( BLI) was recently subject to the same type of attack. Oftentimes, these attacks create a lot of noise but once they settle companies go back to trading on fundamentals. Did Cassava Sciences make mistakes in how the data was presented? Yes, there's no doubt about it. If you go back and you check my University Papers from 10 years ago in finance you will probably find a lot of errors too. But that doesn't change that the most recent third-party verified Simufilam data is real and that it works. It also doesn't change the fact that the FDA and the government are desperate to address this unmet need and will likely end up accelerating the approval of Simufilam.
Cassava Sciences is now more likely than ever before to partner up with another big pharmaceutical company to add credibility to their work and it was hinted on their Q2 quarterly conference call that an announcement in this regard was incoming.
I was able to load up some shares close to the bottom and I am beyond excited about the risk-reward in here.
As a final disclosure, I would like to add that Cassava Sciences' CEO was involved in litigation at Pain Therapeutics after the FDA failed to approve their drug candidate. The case was settled without admission of wrongdoing.
1
