Why Is Cassava Sciences (SAVA) Stock Down 10% Today?
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Shares of Cassava Sciences (NASDAQ:SAVA) declined by as much as 12% today but have since recovered to the $35 range, down about 4%. This was most likely attributed to the release of an article by Probes Reporter.
Probes stated it had discovered two undisclosed Securities and Exchange Commission (SEC) investigations in the “recent past.” Both investigations appear to relate to Cassava’s experimental Alzheimer’s drug, Simufilam, while only one investigation remains ongoing.
This follows a major announcement last month when the SEC recommended a case closing in the investigation of Simufilam. The investigation drew its roots from two physicians who accused Cassava of manipulating its Simufilam research data using software. The physicians then filed a petition to the Food and Drug Administration (FDA), asking the agency to halt trials of the drug.
Controversially, the physicians also disclosed a short position in SAVA stock. Later on, the FDA denied the petition and explained they did not have enforcement power over the trials. However, short sellers of SAVA have been estimated to have made over $100 million in profits.
Why Is SAVA Stock Down 10% Today?
Meanwhile, an article from the Journal of Clinical Investigation, or JCI, by Elizabeth McNally has investors nervous as well. In August of 2021, the JCI received an email alleging misconduct concerning a JCI paper published in 2012. The sender stated that they were “retained by a law firm to investigate a concern of scientific misconduct related to the development of a drug intended to treat Alzheimer’s disease.”
JCI has been asked to provide its opinion on the matter several times this year. It has also received accusatory emails that “do not identify any financial conflicts of interest on the part of the whistleblowers.” As a result, McNally has expressed concerns since the emails “represents a new means of manipulating the scientific publishing industry.”
McNally notes JCI is highly adept at detecting image manipulation and uses AI software to assist with this. She also stated that JCI does not have access to primary data but instead images that represent primary data.
Moving forward, JCI will conduct an investigation into the claims and also ask for any conflicts of interests from whistleblowers. If any evidence of wrongdoing is found, JCI will enact “expressions of concern or retractions.”
On the date of publication, Eddie Pan did not hold (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.