Cassava Sciences is moving forward with Phase III clinical trials for its Alzheimer's drug candidate, simufilam, despite settling with the U.S. Securities and Exchange Commission (SEC) over allegations of misleading data from an earlier Phase IIb study. The SEC's charges, brought against Cassava and two former executives, including founder and former CEO Remi Barbier, and former Senior Vice President of Neuroscience, Dr. Lindsay Burns, allege that the company presented misleading data and misled investors regarding the drug's early clinical results.
The SEC's case centers on claims that Dr. Hoau-Yan Wang, a consultant for Cassava and associate medical professor at the City University of New York’s (CUNY) Medical School, manipulated data from the Phase IIb trial (NCT04079803). The SEC alleges that Wang, having been unblinded to certain data aspects, identified approximately one-third of the trial participants and manipulated their data to suggest that simufilam caused 'dramatic improvements' in total tau and phosphorylated tau levels. Cassava then allegedly disclosed this manipulated data in a September 2020 press release and investor presentation.
SEC Allegations and Settlement
According to the SEC, Cassava and Burns misled investors by claiming the Phase IIb trial was conducted under blinded conditions, despite Wang's unblinding. The SEC also alleges that Cassava misled investors by announcing significant improvements in patient cognition, specifically episodic memory, when a full dataset, including patients removed by Burns, showed no measurable cognitive improvement. Without admitting or denying the allegations, Cassava Sciences agreed to pay $40 million to settle the charges, while Barbier and Burns consented to civil injunctions and agreed to pay penalties of $175,000 and $85,000, respectively. Wang also consented to cease and desist from future violations and paid a $50,000 penalty.
Broader Concerns and Expert Opinions
The SEC case is not the first controversy surrounding Cassava and simufilam. In 2021, the FDA received a citizen petition requesting a halt to clinical trials and an investigation into simufilam. Cassava subsequently filed, and later dropped, a defamation lawsuit against individuals who raised concerns about Wang's research. In June 2024, Wang was indicted on charges of major fraud against the United States, wire fraud, and false statements, alleging he defrauded the NIH of approximately $16 million in federal grant funds.
As Cassava proceeds with its Phase III trials, RETHINK-ALZ (NCT04994483) and REFOCUS-ALZ (NCT05026177), experts have raised concerns about the ethical implications of continuing trials based on potentially fraudulent data. Dr. George Perry, an Alzheimer’s researcher at the University of Texas at San Antonio, suggests Cassava should reconsider its position, stating that it is 'tremendously concerning to run a Phase III trial when the underlying data is being questioned.'
FDA Scrutiny and Potential Outcomes
Experts also question whether the FDA will approve simufilam based on potentially misleading data. David Slovick, partner at Barnes & Thornburg, believes the FDA will be 'doubly concerned' and will scrutinize the results of future testing more closely. However, Perry suggests that if the trials demonstrate independently verified efficacy, the FDA may still have to approve the drug, regardless of the underlying rationale.
To move forward credibly, experts suggest Cassava must distance itself from individuals involved in the alleged wrongdoing. Jason Mehta, co-chair of the Health Care Litigation Area of Focus at Foley & Lardner, stated that 'the only way for a company like Cassava to move forward is to cleanse itself of those alleged to have engaged in this,' which Cassava has begun by letting go of the executives at the center of the controversy.
