Cassava Sciences Inc (NASDAQ: SAVA) is rocketing in the market this morning, and for good reason. The company announced the completion of an End-of-Phase 2 meeting with the FDA and will be moving forward with a pivotal Phase 3 study soon. Here’s what’s going on:
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- Cassava Sciences Gains on FDA News
- Management Commentary
- What Analysts Think About SAVA Stock
- Risks to Consider Before Buying SAVA Stock
- Final Thoughts
Cassava Sciences Gains on FDA News
In the press release, Cassava Sciences announced the successful completion of an End-of-Phase 2 meeting with the FDA for simufilam. Simufilam is the company’s lead drug candidate and is currently under development as a potential option for patients with Alzheimer’s disease.
In the release, SAVA said that official meeting minutes indicate that the FDA and the company agree on key elements of the Phase 3 clinical program to support the New Drug Application filing for the treatment.
Moreover, the company said that agreements reached during the meeting resulted in a clear path forward for advancing the drug into Phase 3 studies in the second half of this year.
Importantly, the FDA has agreed that the completed Phase 2 clinical trial, together with an upcoming and well-defined Phase 3 clinical program, are sufficient to show evidence of clinical efficacy for simufilam in Alzheimer’s disease.
In a statement, Remi Barbier, President and CEO at SAVA, had the following to offer:
For over 10 years we’ve been doing basic research and early drug development with simufilam. We are excited to finally advance simufilam into pivotal Phase 3 clinical studies in people with Alzheimer’s disease. We believe the underlying science is solid, the drug appears safe and the clinical roadmap makes sense. We’ve crossed the Rubicon.
The above statement was followed up by Jim Kupiec, M.D., Chief Clinical Development Officer at SAVA. Here’s what he had to say:
We appreciate the valuable guidance and flexibility FDA has provided. We look forward to continuing a collaborative dialogue throughout the pivotal Phase 3 clinical development program.
What Analysts Think About SAVA Stock
Analysts seem to love Cassava Sciences stock. In fact, according to TipRanks, there are currently three analysts covering SAVA, all of whom rate the stock a Buy.
Price targets range from $24 per share to $80 per share, with a median target of $56.67. However, it’s important to keep in mind that the price target on the low range is largely outdated and likely doesn’t take significant recent events into account.
As such, I’m expecting that we will see price target increases in SAVA stock ahead.
Risks to Consider Before Buying SAVA Stock
If you’re going to buy a stock, whether it be Cassava Sciences stock or any other stock, you’re going to have to be willing to accept risk. After all, risk is part of any investment you make. When it comes to SAVA, some of the most significant risks to consider include:
- Clinical & Regulatory Risks. Cassava Sciences is a clinical-stage company. As a result, it is highly dependent on the success of its clinical trials and regulatory authority views of its work. Should a trial fail or regulatory authorities have a negative opinion about any of the data, significant declines could be ahead.
- Capital Risks. As a clinical-stage company, SAVA isn’t able to generate revenue through the sale of its products. As a result, it must survive on the cash it has on the balance sheet. If that’s not enough to bring simufilam to approval and profitability, the company may look to public markets to raise funds, leading to dilution of existing shareholder value and potentially significant declines.
- Speculation. Any investment in a clinical-stage biotech company is a speculative one. After all, these companies are in the process of developing products and who knows if these products will be approved. Speculative bets add to the risk associated with investing and can result in significant losses.
Although there are risks to consider before diving into Cassava Sciences stock, at present the stock is hard to ignore. Things seem to be going great with simufilam as the FDA continues to back the company’s work as can be seen from today’s press release.
Now, there’s a Pivotal development program on the horizon that could lead to the company to market relatively soon in an area of medicine with a serious unmet need. All in all, the treatment could become a blockbuster very quickly.
As such, SAVA stock is one that shouldn’t be ignored.