Why cassava science stock (SAVA) drop in price doesn’t freak you out

Investors don’t like the latest update from Alzheimer’s drug maker Cassava Science (NASDAQ: SAVA). After showing excellent results from the first 50 patients treated with simufilam, the company’s potential Alzheimer’s drug in an open-label mid-term study, results from more than 200 full patients not as good.

On average, patients were given 2 100mg tablets daily over the course of a year, and these showed only a small change in ADAS-Cog scores. In clinical research on Alzheimer’s disease, this is the cognitive scale used to measure effectiveness.

Over the course of one year, 47% of patients showed an improvement of 4.7 points, while 23% showed a reduction of less than 5 points with an average reduction of 2.5 points.

However, when the company released results from its initial 50 patients in September 2021, on the same scale, 68% showed improvement – or 6.8 points.

The company said that in this group of patients, a minimal change or improvement over a one-year period would lead to a “very desirable outcome.” Investors clearly disagreed with that assessment and sent the stock down 24% in the following trading sessions.

That said, comparing the results to Eli Lilly’s Alzheimer’s treatment, Jones Trading analyst Soumit Roy finds it enough to be encouraging.

“We continue to see modestly better performance with Cassava’s simufilam than Lilly’s donanemab in mild-to-moderate patients… We can expect in the baseline case that Cassava’s simufilam works. slightly better inline performance than LLY’s donanemab, which we see as a big win, considering LLY’s Donanemab could be the only drug approved in the near future (stage leading data). phase 3 in Q2 2023) in mild to moderate patients and increases the scarcity factor for simufilam,” commented Roy.

Indeed, Roy is very bullish here; Along with a Buy rating, the analyst offers a $100 price target for SAVA stock, showing the stock is undervalued by as much as 264%. (To see Roy’s achievements, click here)

Only two other analysts are watching Cassava with one bystander and the other joining Roy in the ranch, making the consensus here to be Buy Moderate. However, all think the stock has a growth opportunity; A median target of $89.33 implies a one-year stock price gain of 203%. (See SAVA stock forecast)

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Disclaimer: The opinions expressed in this article are those of the featured analyst only. Content is used for informational purposes only. It is very important that you do your own analysis before making any investment.


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