Cassava’s Alzheimer’s drug nears P3 readout, but SEC scandal casts long shadow

Cassava is advancing simufilam through a pivotal phase 3 trial, despite lingering controversy from a SEC investigation. As the company prepares to release trial results, Ben Hargreaves finds that questions remain over past data integrity, despite new leadership being keen to move on from the scandal.

The search for effective treatments for Alzheimer’s disease has gathered pace in recent years. Eisai and Biogen have recently reported long-term data on their therapy, Leqembi (lecanemab), which showed that it is able to reduce cognitive decline without increased safety risk. Eli Lilly also gained FDA approval for its treatment, Kisunla (donanemab), for use in patients with mild cognitive impairment or the mild dementia stage of Alzheimer’s.

The two treatments are part of an early wave of new Alzheimer’s treatment, though the approval of these new therapies has not been without difficulty and some controversy. Leqembi was rejected by an EU panel based on safety data, while Biogen pulled its previous Alzheimer’s treatment from the market entirely based on a lack of uptake.

Cassava Sciences is working on bringing its own Alzheimer’s treatment to market to join the new generation of therapies emerging in the area. The company’s CEO, Rick Barry, recently announced in an open letter that simufilam, its potential Alzheimer’s therapy, had completed the last patient dosing of its phase 3 clinical trial. For the company, it marks a step closer to full results and potential approval. However, above the drug and the company, there hangs a dark cloud of a previous US Securities & Exchange Commission (SEC) charge against former members of Cassava’s leadership team and a consultant over phase 2 clinical trial data.

The charges

The SEC released a statement at the end of September detailing the charges against Cassava, and two former executives, with the accusation related to “misleading statements” regarding a phase 2 clinical trial. In a related order, the SEC charged a Cassava-affiliated scientist, Hoau-Yan Wang, with “manipulating the reported clinical trial results.” The findings were the result of a three-year investigation into the company and its actions.

In the charges, the SEC outlined that Wang received information that unblinded him to some aspects of the phase 2 clinical data. The accusation is significant because it allowed Wang to identify approximately a third of patients enrolled in the trial and then “manipulate the data to create the appearance that the drug had caused dramatic improvements in biomarkers associated with Alzheimer’s disease, such as total tau and phosphorylated tau,” the SEC stated.

Cassava then released the altered data in a press release and investor deck, which led the SEC to allege that the company and its former CEO, Remi Barbier, misled investors. In addition, the company did not disclose Wang’s role in the clinical trial, despite his “personal, financial, and professional interest” in the therapeutic’s success.

Damningly for the company, the SEC stated that Cassava failed to disclose that the full set of patient data from the phase 2 trial showed “no measurable cognitive improvement in the patients’ episodic memory,” despite the company claiming that there were “significant improvements” made by patients.

“Our capital markets can and should be a powerful engine for innovation in the development of new and potentially life-altering therapeutics,” said Mark Cave, associate director of the SEC’s Division of Enforcement, in a statement on the action. “Today’s actions – which include charges against senior executives and significant monetary relief against Cassava – reflect our commitment to upholding public confidence in the market’s ability to accelerate legitimate scientific advances.”

In total, Cassava was fined $40 million, while Barbier and the company’s former SVP of neuroscience, Lindsay Burns, both received civil penalties of $175,000 and $85,000, respectively. Wang consented to cease and desist from future violations and to pay a $50,000 penalty.

Remedial action

Cassava agreed to pay the fine without admitting or denying the SEC’s allegations, though it noted in a statement that the company had cooperated with the investigation and had “implemented remedial measures.” The company had got ahead of the SEC announcement by announcing that Barbier and Burns would leave the company. In Barbier’s stead, the company placed Richard Barry as executive chairman and temporary CEO.

Acknowledging the controversy, Barry was quoted upon his appointment as saying: “While our priority remains the development of a potentially effective treatment for Alzheimer’s disease, the board has a steadfast commitment to doing so with transparency, accountability, and highest ethical business practices.”

As part of this action, the company had stated that it would be ‘open’ in its communication and engagement with stakeholders. In line with this policy, Barry published the previously mentioned open letter on the announcement of the completion of the company’s phase 3 trial into simufilam. Within the letter, Barry underlined how the trial had been “rigorously designed and executed,” including providing details on how the trial results will be managed.

“The trial is managed by Premier Research International as our clinical research organisation. After Premier has completed its final review procedures regarding the completeness and accuracy of the data, the database will be locked. No changes to the data will be made after database lock,” he stated.

An uncertain future

The communication of the security of the trial data is one element that will be crucial for the company to succeed, as it needs to ensure shareholder support. Immediately after the release of the SEC investigation results, the share price of the company plunged by nearly 50%. At the time of writing, the stock has recovered and is now at its highest level since 2023.

However, the next major test for the company will be the results themselves. Barry stated the top-line results from the phase 3 trial would be made available before the end of the year. For the company, there is a lot on the line for the results, with simufilam being its only asset in development. There is also uncertainty over whether Cassava should have been able to proceed into phase 3 trials based on the data from its phase 2 trials.

Once the trial results are released, any regulatory filing will likely be reviewed with additional scrutiny given the highly public case and questions over the integrity of phase 2 data. The case had already been called to the FDA’s attention, when a citizen’s petition was filed to the agency calling for it to halt clinical trials into the potential treatment. At the time, the agency declined because the calls for it to instigate an investigation and make public disclosures are outside of its remit. Regardless, with such a rocky road to the approval of existing Alzheimer’s treatments, the FDA and other regulatory bodies are likely to tread very carefully when reviewing Cassava’s potential regulatory filing.