Cassava forms committee after US probe, researcher fraud

Cassava Sciences (SAVA) is reportedly forming a committee to investigate two senior employees. This comes after a US probe into fraud and a Cassava researcher was indicted by a jury over alleged fabrication of Alzheimer's drug trial results.

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This post was written by Luke Carberry Mogan.

Video Transcript

Sava Science is announcing today, it's forming a committee to investigate two senior employees.

This coming days after a researcher connected, the company was indicted on fraud charges that researcher allegedly submitting fake data to the National Institutes of health related to an experimental Alzheimer's treatment.

The stock was also temporally halted Friday due to volatility after plummeting more than 40%.

So this one is a it's a complicated one show.

I mean, Cassava is a small company, it's market capital 600 million, but it was making headlines.

Um and per reports you did have this advisor to the company indicted by a jury.

The allegation is submitting fabricated falsified data to secure this I guess 16 million grants from the National Institute of Health.

Um In a statement to the journal, the company would say, listen, this person is no longer a paid advisor to the company hasn't been involved in late stage testing for this drug in question, but certainly getting a lot of attention.

It certainly is getting a lot of attention.

Now, doubts surrounding this drug first started just about three years ago here followed by that investigation by the SEC in November of 2021.

So we have been talking about this now for a bit of time now because Sava Sciences to their defense, they added that this doctor had no involvement with the late stage trial.

So trying to reassure some of the skeptical investors out there just about the impact that maybe he had had on some of those later stage trials here.

But again, lots of or indeed, they did also say that they terminated their consulting relationship with the doctor prior to his indictment.

But clearly, it's a note I reached out to the analyst at HC Wainwright because they cover the name, bottom line.

They did downgrade the stock, the new to neutral.

They did not assign a price target, telling their clients who was the quote.

We believe this controversy could be a significant long term challenge to realizing upside in Cassava stock and a top trending take here on Yahoo Finance today.