[SAVA] Simufilam Will Steal the Alzheimer’s Spotlight
tl;dr – Biogen (BIIB) rocketed $27B in valuation based on a drug that isn’t proven to work, has serious side effects, and costs $56,000 per year. I’d rather yolo into a company, Cassava Sciences (SAVA), with consistent, promising results and a $2.6B market cap that will own the AD market.
A Troubling Decision
On June 7, the FDA approved Biogen’s Aducanumab for the treatment of Alzheimer’s Disease (AD) sparking front-page worthy controversy. Facing intense pressure to approve a drug for a disease with no cure and no new treatments since 2003, the FDA chose to approve Aducanumab in the face of overwhelming opposition from the medical community (, ). Prior to this approval, the FDA head of neurology Billy Dunn faced intense scrutiny for giving Biogen unprecedented leniency in the phase 3 trial review (). Long story short: the two phase 3 trials Biogen conducted were deemed inconclusive regarding the efficacy of Aducanumab’s primary endpoint: cognition. 23% of patients dropped out of both trials due to side effects of the drug: most notably brain swelling and in some cases, brain bleeds (). Both trials were stopped at the halfway point after preliminary analysis found that they were unlikely to show efficacy. Instead of rejecting the drug, the FDA stepped in with Biogen to salvage the trials.
As more details about Aducanumab came out following approval, the noise surrounding this decision only grew. News of the $56000 a year price tag on Aducanumab () hit the Reddit front page and if you’d take a gander at any of the comment sections discussing Aducanumab, you’ll see a range of responses, including this one from r/medicine:
FDA granted approval to aducanumab on the basis of the reduction of beta amyloid — NOT for the slowing of cognitive decline in patients. This is frankly a troubling shift away from clinical efficacy and towards biomarker endpoints (which we don’t even know if the beta amyloid hypothesis is correct). Everyone is now going to be burdened with the cost (except Biogen and Biogen investors) to test whether or not the amyloid hypothesis is correct.
and this one from r/nottheonion:
The real scam is that the drug hasn’t even been proven to be very effective, if at all.
The June 7th decision was made without a second vote from the FDA panel of scientists which initially voted 10 out of 11 against approval (), with the 11th medical scientist recusing himself from the vote due to conflict of interest, and was expected to vote against approval again.
Following the June 7 decision, two out of the 11 panelists resigned from their position (), including the Mayo Clinic neurologist Dr. David Knopman who had initially recused himself because he consulted for Biogen.
stink to high heaven
- To have a very strong, unpleasant odor.
- Can you take this trash out? It stinks to high heaven.
- To be or seem extremely disreputable, suspicious, or corrupt.
- This decision by the FDA on Aducanumab stinks to high heaven, if you ask me.
So What’s Next?
One investor on r/stocks suggests:
Short it. Amyloid-based treatments, even when effective at removing plaques, have consistently failed to stall disease progression.
Unfortunately, turning gay bear isn’t the best way to approach such a colossal fuck-up. Who knows how long it will take for Aducanumab to finally get pulled. Spreading awareness about the serious risks and extremely dubious science involved in the approval is the best way to counteract the harm this decision may bring.
But this is WallStreetBets, so I’m giving you another option.
Cassava Sciences (SAVA) has a first in class drug, Simufilam, that works by stabilizing a critical protein filamin A in the brain (). Unlike Aducanumab and countless failed drugs before it, Simufilam does not seek to clear amyloid out of the brain. SAVA completed phase 2 trials showing no serious side effects and is moving on to phase 3 trials. On February 2, 2021, Cassava Sciences announced positive results of a first interim analysis that summarizes clinical data on the first 50 subjects to complete 6 months of open-label treatment. Patients’ cognition scores improved from baseline following 6 months of Simufilam treatment, with no safety issues. Six months of Simufilam treatment improved cognition scores by 1.6 points on ADAS-Cog11, a 10% mean improvement from baseline to month 6.
In September 2020, SAVA shot up on positive phase 2b results. In February 2021, SAVA hit all time highs of $117.54 after releasing interim analysis of open label (no control) results. In an interview with Being Patient Alzheimer’s, () the CEO Remi Barbier responded to a question: "In particular, what did the data say that made you excited?"
It’s not any one specific data. That’s the difference with our approach. It’s the consistency of data from the basic research to the animal data, to the CSF biomarkers, to the early cognition, to the open label study. There’s a consistent theme that, in my opinion, the world of Alzheimer’s Disease R&D has never seen before.
The next milestone is nine month open label results. No prior AD drug has shown improvement at nine months.
Just How Far is it to the Moon?
On the day of the decision BIIB stock was halted for the greater portion of the trading day and when trading finally resumed, BIIB stock soared 63% from $286 to $468.55 immediately after the decision (closing the day at $395.85 a share). With 150M shares, this represented a market capitalization increase of $27B from $43B to $70.5B. The market thinks an Alzheimer’s drug is worth $27B in market cap.
SAVA right now is currently trading at a market capitalization of about $2.66B. Assuming a $27B valuation, SAVA represents a true 10x opportunity from the current market price of $66.38 to my price target: $663.80. Regarding timeline, SAVA is about start its phase 3 trials (H2 2021) and will release 9 month Open Label results on July 26th at the 2021 Alzheimer’s Association International Conference. ()
Positions: 3954 SAVA, $10c 01/21/22, $20c 01/21/22, $45c 01/21/22, $22.5c 01/20/23
On a purely speculative note: This absurdly titled article calling SAVA a meme stock caught my eye recently.
- Insider buying shows extreme confidence in the stock and the CEO has diamond hands.
Despite a stock rally that makes his 5% stake — including options — worth more than $100 million, Barbier says he’s not selling. “I know the science, I know the data, I know the disease and this stuff looks promising and I’m putting my money where my mouth is.”
2) Despite the fact that SAVA receives basically no attention on this forum, Bloomberg is all too happy to ascribe it meme status. SAVA isn’t a meme stock until this sub makes it one.
- If the FDA approves Biogen’s Alzheimer’s treatment, I won’t prescribe it, Op Ed
- Failure to demonstrate efficacy of aducanumab, Journal
- HHS Inspector General Must Investigate FDA’s Inappropriate Collaboration with Biogen on Alzheimer’s Disease Drug, Public Citizen Demands, Article and Open Letter
- EMERGE and ENGAGE Topline Results, PDF presentation
- Biogen CEO says $56K a year for new Alzheimer’s drug is a ‘fair’ price, Article
- FDA panel urges rejection of experimental Alzheimer’s drug, Article
- Two members of U.S. FDA advisory panel resign over Alzheimer’s drug approval, Article
- Cassava Sciences May 2021 Presentation, PDF presentation
- An Inside Look at Cassava’s Experimental Alzheimer’s Drug, Video, 49:28
- Cassava Sciences Reports First Quarter 2021 Financial Results and Announces Guidance on Clinical Data Release, Press Release
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June 10, 2021 at 04:09PM