Cassava Sciences, Inc has filed a motion to dismiss the consolidated class action securities fraud case against it. The plaintiffs allege that Cassava lied about the promising clinical trial results of their in-development Alzheimer’s treatment, simufilam.
Cassava is a clinical stage biopharmaceutical company, whose primary business is developing simufilam, a medicine intended to inhibit the progression of Alzheimer’s disease. In February 2021, the company announced positive results for its Phase 1 and Phase 2 clinical trials, and subsequently received approval from the Food and Drug Administration (FDA) to proceed with a randomized controlled trial to determine efficacy. These Phase 3 trials are currently ongoing. This news led to a surge in Cassava’s stock price, the motion said.
In August 2021, two individuals filed Citizen Petitions alleging that Cassava manipulated data; however, the motion says that that both were revealed to have shorted Cassava stock. The damage was done, though, according to court filings, and Cassava’s stock plummeted in value, and numerous security fraud complaints were filed.
In their motion to dismiss, Cassava argues that the plaintiffs failed to offer any evidence beyond what was alleged in the Citizen Petitions, which they claim to have disproven. As evidence they cite the numerous journals who have reviewed papers published by Cassava’s lead researchers and found no evidence of specifically manipulating data.
Cassava further cites the FDA’s February 2022 statement that “[r]equests for the [FDA] to initiate enforcement action and related regulatory action are expressly excluded from the scope of FDA’s citizen petition procedures.” They also argue that no criminal charges have been filed to date. And finally, Cassava alleges that the complaints filed to date have been “puzzle plead” and it is not the court’s duty to sort out which alleged evidence gainsays which allegedly false statements.
Cassava is represented by Orrick, Herrington & Sutcliffe, and the suit is proceeding in the Western District of Texas, where Cassava is based.