2023-06-20 07:27:39 ET
Summary
- Cassava Sciences' results from the 6-month randomized CMS, using simufilam for the treatment of mild-to-moderate AD patients, are expected to be released in Q3 of 2023.
- It is expected that the global Alzheimer's Disease market could reach $6.3 billion by 2029.
- Results from the two phase 3 AD studies, RETHINK-ALZ and REFOCUS-ALZ, could be released at some point in 2024.
- Cassava Sciences had $187.5 million in cash as of March 31, 2023; enough cash to only fund its operations for at least the next 12 months.
Cassava Sciences ( SAVA ) is a good speculative biotech play to look into. The reason why I state that is because this company is exploring the use of simufilam for the treatment of patients with Alzheimer's Disease [AD]. It is exploring the use of this drug for the treatment of this patient population in two ongoing phase 3 studies known as RETHINK-ALZ and REFOCUS-ALZ. Even though both of these late-stage studies are not expected to have results released from them until some point in 2024, I believe there is an earlier catalyst opportunity for which investors might be able to capitalize on. There is another study being done by Cassava known as the Cognition Maintenance Study [CMS], which is expected to have results released in Q3 of 2023.
Why I believe this may offer investors a huge opportunity is, because it could provide insight into whether or not simufilam might succeed in the ongoing phase 3 studies treating patients with AD. In essence, this CMS study is doing the opposite of what other studies have done thus far. It is looking to see what happens with cognition, after patients who have been taking simufilam for a 1-year period, just stop taking the drug altogether. Why I think this is important is because it might show evidence that simufilam was actually helping these patients while they were on it. The CMS Alzheimer's study data readout in Q3 of 2023, plus two late-stage data readouts in 2024 for the very same indication, are the reasons why I believe that Cassava Sciences is a good speculative biotech play to look into.
Cognitive Study Might Be Critical Component To Company's Success
As I stated directly above, Cassava sciences has an ongoing 6-month randomized, double-blind placebo-controlled trial known as the Cognition Maintenance Study [CMS]. This study is treating patients with Alzheimer's Disease [AD]. Alzheimer's Disease occurs when there is severe dementia in place. It starts off slow, with things like memory loss and then possibly leads to loss of other functions such as being able to respond to the environment around you. This disease really has a negative effect on parts of the brain, which is responsible for controlling memory, thoughts and language. It is a very large market opportunity should Cassava Sciences ultimately succeed in it. It is expected that the global Alzheimer's Disease market could reach $6.3 billion by 2029 . This trial is different than what this biotech has done in the past in terms of testing simufilam for the treatment of patients with [AD]. That is again, the goal is to see what happens with respect to cognition when patients who were on simufilam stop taking it. Why is that? That's because this might provide evidence on whether or not patients see a decline in cognitive function once they stop taking this AD drug.
This trial is randomizing 125 patients 1:1 to either receive treatment with simufilam or placebo. The primary endpoint is going to be looking at safety and change in cognition scores [using ADAS-Cog] over a 6 month period. With all this said, the study is only recruiting patients who have completed 12 months or more of open-label treatment with simufilam. It will be important to see what happens when patients who took this AD drug for a year stop taking it for 6 months. That is, to test out a difference for those who continue to receive simufilam treatment versus the group of patients randomized to placebo instead. Enrollment of this 6-month CMS study was completed on May 11, 2023 . I believe that this might be an important finding in possibly determining whether or not Cassava will achieve success in the two ongoing phase 3 Alzheimer's Studies. Traders/investors won't have to wait for a long time to see this catalyst either. It is expected that results, from this phase 3 study using simufilam for the treatment of patients with AD, will be released in Q3 of 2023.
Some Proof Of Concept Data Provides Insight Into Other Ongoing Studies
What provided some preliminary proof of concept would be results that were released back in Q1 of 2023 , from a phase 2 open-label study which explored the use of simufilam for the treatment of patients with Alzheimer's Disease [AD]. This open-label study recruited a total of 200 patients with mild-to-moderate AD. These patients received 100 mg of simufilam twice daily for over a 1-year period. Before diving into the data, it is important to note the difference between the mild AD patient population and then the moderate AD patient population. Such a difference is assessed with an MMSE score as follows:
- Mild AD patients recruited into this study had an MMSE score of 21-26
- Moderate AD patients recruited into this study had an MMSE score of 16-20
When it comes to the MMSE score, the maximum possible is 30 points. A score of 25 or higher means that a patient is considered to be normal. However, if the score ends up being 24 or below , then it might be indicative of a cognitive impairment being in place. I bring this up to show you that the moderate population [with lower range MMSE score] was tougher to treat. This is exactly what was shown with respect to these patients who took simufilam and were measured from baseline to month 12 using ADAS-Cog scores.
One important thing to note is that with respect to ADAS-Cog score is that the bigger the decline is, the greater an improvement of cognition which is present. The data shown was the following:
- Mild-sub group had ADAS-Cog scores improve from 15 to 12.6 (improved taking simufilam)
- Moderate-sub group had ADAS-Cog scores worsen from 25.7 to 30.1
As you can see directly above, the ADAS-Cog scores declining was a good thing for the mild-AD subgroup patients. That's because a lower score in ADAS-Cog means an improvement, compared to patients who have a higher score where a decline is present. However, the moderate AD sub-group saw ADAS-Cog score worsen because of the increase from 25.7 to 30.1. The final conclusion is that mild AD patients responded much better compared to moderate AD patients. What this means going forward is that ultimately simufilam might only be suitable for mild AD patients and not for moderate AD patients. Further evidence of this won't be known until the results are released from the upcoming 6-month CMS and the two ongoing phase 3 studies. That's because all of these studies are exploring the use of simufilam in both mild and moderate AD patients. In the end, it could just be that simufilam does well in only the mild-AD patients, which would not be a bad thing.
Financials
According to the 10-Q SEC Filing , Cassava Sciences had cash and cash equivalents of $187.5 million as of March 31, 2023. For this biotech to stay afloat, it has had the need to raise cash through public or private offerings, payment received through collaboration agreements and interest earned on cash and cash equivalents balances. A part of the reason for the cash on hand, which the company has, would be because of the Registered Direct Offering that was done back on November 22, 2022 . That is when it completed a common stock offering in which it sold a total of 1,667,667 shares of its common stock at a public offering price of $30 per share.
With this offering, it raised a total of $47.3 million after deducting offering expenses. Despite the amount of cash on hand of around $187.5 million, there is going to be the need to raise additional cash. That's because in its 10-Q SEC Filing, Cassava states that it will have enough cash to fund its operations for at least the next 12 months. This means it is going to need to find a way to raise additional cash in the coming months. I believe that should the results to be released, from the ongoing open-label CMS using simufilam for mild-to-moderate AD patients be positive, then it won't hesitate to enact a cash raise right away.
Risks To Business
There are several risks that traders/investors should be aware of before investing in Cassava Sciences. The first risk to consider would be with respect to the upcoming release of results from the open label CMS. That's because there is no guarantee that this study will turn out to be successful. Not only that, but like the other study, it is recruiting both mild and moderate AD patients. Thus, the results could be mixed in that simufilam performs well in mild AD patients, but then does poorly against moderate AD patients. A second risk would relate to the two ongoing phase 3 studies. Even though there has been data along the way to suggest that simufilam might be effective in treating AD patients, there is no guarantee that this will be shown in the two late-stage phase 3 studies. The final risk to consider would be with respect to the financial position in which this company is in. That's because as I stated above, it believes it only has enough cash to fund its operations for at least the next 12 months. Having said that, I believe it is going to look at raising additional cash in the coming months.
Conclusion
The final conclusion is that Cassava Sciences is a good speculative biotech play to look into. That's because it has an important catalyst which traders/investors can look forward to in the coming months. It is expected that in Q3 of 2023, there will be the release of results from the 6-month CMS which exploring to see what happens if patients who have been treated with simufilam for 1-year, stop taking it for a 6 month period. It is expected that recruitment for both phase 3 studies, using simulfilam for mild-to-moderate AD patients, will be completed by Q4 of 2023. Thus, this sets up other catalyst opportunities for traders/investors to look forward to. This would be the fact that results from both of these late-stage phase 3 Alzheimer's studies could be released at some point in 2024. With the upcoming release of data from the CMS using simufilam for AD, plus two late-stage trial AD readouts in 2024, I believe that Cassava Sciences is a good speculative biotech play to look into.
For further details see:
Cassava Sciences: Upcoming Q3 Data Release Could Reveal Further Efficacy Of Simufilam