Investors didn’t like the Alzheimer’s drugmaker’s latest update Cassava Science (NASDAQ: SAVA). After showing great results in the first 50 patients treated with simufilam, the company’s prospective Alzheimer’s disease drug in a mid-stage, open-label study, results in more than 200 patients weren’t as good.
Patients received 2 tablets of 100 mg daily for an average of one year, and these showed only minimal change in ADAS-Cog score. In clinical research on Alzheimer’s disease, it is the cognitive scale used to measure effectiveness.
Over one year, 47% of patients showed an improvement of 4.7 points, while 23% showed a drop of less than 5 points with an average drop of 2.5 points.
Yet when the company announced results for the first 50 patients in September 2021, on the same scale, 68% showed improvement – or 6.8 points.
The company said that in this patient population, minimal change or improvement over a one-year period equates to a “highly desirable outcome”. Investors clearly disagreed with this assessment and sent shares down 24% in subsequent trading sessions.
That said, comparing the results to Eli Lilly’s Alzheimer’s treatment, Jones Trading analyst Soumit Roy finds enough to be encouraged.
“We continue to see slightly better performance with Cassava’s simufilam compared to Lilly’s donanemab in the mild-to-moderate patient population…We would expect the base case to be that Cassava’s simufilam works in line slightly better than LLY’s donanemab, which we consider a big win, considering LLY’s donanemab may be the only drug approved in the near future (Phase 3 primary data to 2Q23) in mild to moderate patients and increase the scarcity factor of simufilam,” Roy said.
Indeed, Roy is very much on the bullish side of the spectrum here; in addition to a buy rating, the analyst gives SAVA shares a price target of $100, suggesting the stock is 264% undervalued. (To see Roy’s list, click here)
Only two other analysts have been keeping tabs on Cassava’s progress, with one remaining on the sidelines and the other joining Roy in the bullish camp, making the consensus here a Moderate Buy. However, everyone thinks that equities have room for growth; the average target of $89.33 implies a one-year stock appreciation of 203%. (To see SAVA inventory forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The Content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.