Cassava Sciences (SAVA) - Get Free Report tumbled Wednesday after a lawyer asked federal regulators to halt clinical trials of the drugmaker's Alzheimer's disease candidate over concerns about how the treatment was tested.
The Austin, Texas company issued a statement calling the allegations "false and misleading" and that it "stands behind its science, its scientists and its scientific collaborators."
Shares were down 20.1% to $94.25 at last check.
The charges were made by Jordan Thomas, a partner and chair of the whistleblower representation practice at Labaton Sucharow and a former Security and Exchange Commission enforcement lawyer who helped set up the agency’s whistleblower program.
The "statement of concern" was posted on a U.S. government website Monday seeking a halt to trials of the drug simufilam for Alzheimer’s
"This report raises concerns about the quality and integrity of the laboratory-based studies surrounding this drug candidate," the statement said, and notes "a long-standing pattern of seemingly intentional data manipulation and misrepresentation in scientific papers and corporate disclosures."
The statement criticizes the integrity of the laboratory testing of the drug on several points.
"The volume of problematic material uncovered in publicly available sources indicates a thorough audit would likely unveil significant additional scientific misconduct and data manipulation," the statement said.
In its response, Cassava Sciences addresses each point raised in the statement and labels them as "fiction."
"As a science company, we champion facts that can be evaluated and verified,” Remi Barbier, president and CEO, said in a statement. “This helps people make informed choices. It is important for stakeholders to separate fact from fiction, which is why we wish to address allegations head-on.”
On Tuesday. Cassava Sciences said it had reached agreement with the Food and Drug Administration under a Special Protocol Assessment for its Phase 3 studies of oral simufilam for the treatment of patients with Alzheimer’s disease.
The company also reaffirmed prior guidance to advance simufilam into a Phase 3 pivotal program in Alzheimer’s disease in the fall.
JonesTrading analyst Soumit Roy said in a research note that Cassava's press release addressed most key concerns raised by the report, according to the Fly.
Roy said the report "could have a few valid points but also possibly over-interpreted with excessive digital analysis of figures published 15+ years ago in few instances."
He reiterated his buy rating on Cassava and $215 price target.
In February, Cassava Sciences said that in planned a Phase 3 clinical trial for simufilam in the second half of the year.
The company had earlier reported progress in a study of the drug.
Alzheimer's disease treatments have been the source of controversy recently.
Three members of an FDA advisory committee that assessed the drug resigned from the panel, questioning whether the drug works.