2023-04-26 13:17:28 ET
Summary
- Patient dosing for the Cognition Maintenance Study of lead candidate simufilam is slated to complete this quarter.
- CMS top-line results are expected in Q3.
- New evidence supporting simufilam's mechanism of action (MOA) points to a likely positive outcome.
My previous coverage of Cassava Sciences (SAVA), a small ($975 million cap) biotechnology company, near the beginning of 2023 , highlighted comments and analysis by Suzanne Hendrix, PhD, a respected FDA consultant and CEO of Pentara, a biostatistical consulting company specializing in neurodegeneration including Alzheimer's disease ((AD)). On the positive topline results of PTI-125-04, a Phase 2 open-label safety ((OLS)) study of simufilam, Hendrix staked the reputations of herself and her company by stating, "The improvement in ADAS-Cog over 1 year in mild patients taking simufilam is well outside the expected range of historic placebo decline rates from numerous other studies." This claim was reinforced by simufilam passing the "eye test" when compared to pivotal trials (Table 4) of approved and almost-approved AD drugs. The market wasn't impressed, perhaps wondering if it was somehow all due to chance? As Cassava approaches the next clinical catalyst, investors can be encouraged by evidence pointing to another success.
Longs may already be familiar with the 3 recent articles cited on Page 8 of the March 2023 Corporate Presentation . Canadian researchers obtained brain cortex tissue samples from participants in the Religious Order Study ((ROS)), a U.S. aging and dementia study that's been ongoing since 1997. They observed higher concentrations of insoluble filamin A in AD patients ((FLNA)), compared to age-matched controls. They also associated cellular overexpression of FLNA with increased phosphorylated tau (p-tau), as well as overexpression of annexin A2, a partner protein which interacts with both FLNA and tau, which could contribute to the formation of hyperphosphorylated tau aggregates called neurofibrillary tangles (NFTs) in neurons, a hallmark feature of AD. Meanwhile, Japanese scientists induced tau pathology from transgenic mice carrying the human Flna gene, but there was no increase in FLNA levels, suggesting that FLNA abnormalities happen before tau pathology . Finally, an American team mostly hailing from Yale University studied mice expressing constitutively active ras homolog enriched in brain (RhebCA). They duplicated findings that RhebCA increases FLNA levels, and demonstrated that treating mice with simulfilam from postnatal days 8 to 65 before seizure onset reduced seizure frequency by 73% ; treatment after seizure onset similarly decreased seizure frequency compared to saline. Because Flna knockdown also reduced seizure frequency, they determined it was simulfilam's "effect on FLNA that alleviates seizures."
Investors should also consider the even newer ROS data. The same Canadian team found that levels of insoluble FLNA was significantly and positively associated with concentrations of the common amyloid beta (A?) fragment, A?42 (p = 0.036) and neuritic plaques ("NP") (p = 0.042), which are the clumps formed by A? deposits, the other hallmark feature of AD. NP was further positively correlated with total tau (t-tau) and p-tau, and A?42 was positively associated with p-tau. They concluded that "FLNA levels were indeed exclusively associated with A? neuropathology, but not with tau." This supports the ideas that FLNA abnormalities occur upstream from tau pathology. As a reminder, simulfilam decreased t-tau in the OLS by 38% (p<0.00001) and its proposed MOA is restoring altered FLNA, which in turn disables A? neurotoxicity.
More advances in p-tau knowledge were made in 2023. Chinese clinicians were the first to explore the correlation of serum levels of p-tau181 (tau phosphorylated at threonine-181) with cognitive impairment in patients with preeclampsia ("PE") compared to pregnant healthy controls and non-pregnant healthy controls. They found p-tau181 was elevated in PE patients, who also scored lower on the Symbol Digit Modalities Test (SDMT), a standardized cognitive function test. The highly negative correlation between p-tau181 and SDMT (r = ?0.376, P ? 0.001) was significant. P-tau181 may be assayed from a blood draw, and it could be a viable non-invasive biomarker to assess cognitive decline in PE patients. A group mostly representing Rush University Medical Center in Chicago was the first to use p-tau to differentiate AD from primary age-related tauopathy ((PART)). PART exhibits NFT formation but A? is absent while AD has both. The two conditions overlap in Braak tangle stage 3 or 4. Plasma levels of p-tau181 was 40% higher in AD than PART, but established that p-tau217 had higher specificity for AD, which would make it a better tool to identify suitable AD patients for clinical trials. In the OLS, simulfilam decreased p-tau181 by 18% (p<0.00001).
Financials and Takeaways
Cassava has $201 million in cash and no debt as of December 31, and a net loss of only $77.5 million in 2022. Research and development took up the bulk of that, at $68.0 million. They used up the last $0.9 million of the $5.574 million in National Institutes of Health research grants awarded from April 2020 to May 2021. These awards required milestone-based technical progress, were paid out on a reimbursement basis, and recorded as a reduction in R&D expenses.
The company anticipates operational expenses for the first half of 2023 to be $45-$50 million, so they won't be needing extra financing right now. SAVA gained double-digit short term gains in-line with my other bullish articles (Figure 1), but trading has been choppy and trending down since first coverage in December. Legal distractions and the fact that the OLS can't prove causality may have turned away some investors. In the meantime, another A?-based AD med was approved. However, there has been much doubt about simulfilam's MOA, and its link to A? may have been overlooked.
Figure 1. Performance of CSI's Buys and Strong Buys from September 2022 compared to S&P ETF.
Seeking Alpha
To conclude, Cassava's finances are in good shape, such that Director Richard Barry bought a sizeable $2.3 million worth of shares last month, with the expectation that SAVA will go up. The newest research appears backs him up and investors who buy now will be getting a 10% discount to his prices.
For further details see:
Buy Cassava Sciences For Imminent Data Readout