The markets have been volatile lately, but the swings have not been like those of Cassava Sciences (SAVA) stock. After a sharp rise in the first half of the year, since the end of July, the shares have lost 55% of their value.
The stock’s rise and fall is based entirely on events surrounding simufilam – the company’s future treatment for the notoriously difficult-to-treat Alzheimer’s disease (AD). Earlier this year, data from an ongoing open-label study showed that the drug improved patients’ cognitive behavior after 6 months and even 9 months of therapy — something never done before by any Alzheimer’s treatment. But then questions about the company’s methods and use of the data surfaced, and a citizen petition was filed with the FDA alleging that the data had been tampered with and that the results of the investigation were a sham. What was Cassava broth more like hot potatoes – hot cassavas? – with investors withdrawing.
So sentiment was low, but could there be a reversal in the cards? On Wednesday, the company reported that after 12 months of simufilam treatment, the patients’ cognitive functions continued to improve — albeit at a more measured pace — and emphasized that the analysis was done by two separate independent biostatisticians after the cognitive test results were fed into a system. under the supervision of an outside company.
Mayank Mamtani, a long-time fan of B.Riley, has backed Cassava all the way, but while the analyst says the cognition data could “rekindle confidence” ahead of the impending Phase 3 trial (earmarked for Q4) , he thinks more information will be needed for sentiment to really change.
“While this method of updating and evaluating cognition data to some extent allays investor concerns arising from the recent Citizen’s Petition questioning the core scientific hypothesis of simufilam, we emphasize the need for supportive 12-month biomarker analyses. , which is also independent of the company and its subsidiaries to help recreate similar levels of confidence in simufilam’s disruptive potential noted earlier in 3Q when SAVA posted a comprehensive 9-month data update at the AAIC’21 medical conference,” noted Mamtani up.
Overall, Mamtani maintains a buy rating on SAVA stock, along with a price target of $108. Investors could expect an 80% return should his thesis bear fruit over the next 12 months. (To view Mamtani’s track record, click here)
The unanimous Strong Buy consensus rating for this stock, supported by 4 Buy ratings and 1 Hold, makes it clear that Mamtani is not alone in his optimistic view. The average price target here, $147.40, is even more optimistic, suggesting a ~145% gain from the current trading price of $60.12. (Check out cassava stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are those of the featured analyst only. The content is for informational purposes only. It is very important to do your own analysis before making any investment.