The Alzheimer’s drug market climbed to a value of $6.34 billion in 2020, according to research company IMARC, and there are various pharmaceutical firms with Alzheimer’s drugs in their pipelines. One of those companies is Texas-based Cassava Sciences Inc, entering the stock market and allowing market participants to access to one of the private companies that was able to surge forward during the COVID-19 pandemic.
Cassava Sciences Inc (NASDAQ: SAVA) is a clinical-stage biotechnology company working on developing a scientific approach to treat and detect Alzheimer's disease. The company’s therapeutic product candidate is called simufilam, a novel Alzheimer’s treatment. Its investigational diagnostic product candidate is called SavaDx, used to detect the presence of Alzheimer's disease from a small sample of blood, possibly years before the appearance of clinical symptoms.
SAVA Stock Price
Cassava Sciences has made impressive gains in 2021, reaching a peak share price of $146.16 on July 29. Since then, the price has fallen, but it has still achieved a 379.25% gain since the start of the year. Financial instruments such as this have grown quickly, and they might give you reason to purchase additional shares while you still can.
In the last year, SAVA’s stock price improvements can be attributed to its biomarket data, which analysts praised.
However, the stock lost momentum and its share price was impacted by short-sellers over a Citizens Petition, claiming a lack of institutional shareholder base and investor relations department casting doubt over the company. A Citizens Petition is a process offered by the FDA whereby individuals and organizations can request changes to health policies. The petition caused the company to lose over $2 billion in market cap.
Despite the questioning of the credibility of the data presented by Cassava Sciences, the chief executive has addressed the allegations as “false and misleading.”
Alzheimer drug producer Prothena (NASDAQ: PRTA) is a close competitor of Cassava, with a market cap of $3.37 billion compared to Cassava’s $1.93 billion. Prothena’s share price has surged 540.63% this year due to promising data.
Elsewhere, Biogen (NASDAQ: BIIB) shares are trading over 5x higher than Cassava. Its Alzheimer’s drug has been approved by the FDA, but that doesn’t mean it has a better chance of succeeding, with Cassava’s candidate yet to undergo Phase 3 trials. This means that economic growth in this sector seems to be coming in waves. Stock assessment reports may not do the sector justice, but you also must remember that Fed rate hikes may cause cahs flow problems or stunt the growth rate of the industry. Only time will tell—and often in retrospect.
SAVA Stock Forecast
Investing in pharmaceutical stocks can be tricky sometimes because of the complicated nature of the industry. Some of the issues investors face are understanding how the trial phases work, if and how drugs or products can be cleared by the various regulatory bodies such as the FDA, and what happens if a drug fails to meet one of its endpoints in a trial.
Cassava Sciences has recently acquired some negative attention after allegations about the quality and integrity of the company’s studies for Cassava's lead drug candidate, simufilam, which is under development for Alzheimer's disease.
As a result of the allegations, several analysts updated investors on their views.
JonesTrading analyst Soumit Roy said in late August that while he did not have the relevant expertise or access to the original data, he remains positive on the 12-month data from Q4 and kept his Buy rating and $215 price target. Roy said the report "could have few valid points” but is “also possibly overinterpreted.”
Analyst Mayank Mamtani at B. Riley recommended buying Cassava Sciences shares after the FDA acknowledged the Citizen Petition, stating that there are “numerous inconsistencies” to the allegations and that there was "particularly weak, speculative evidence." Mamtani reiterated his Buy rating in late August.
Cantor analyst Charles Duncan reacted differently to the news. Again in late August, the analyst suspended his previous Neutral rating and $109 price target. Duncan did, however, say that it isn’t possible to "properly diligence" the allegations without non-public records and the raw data, which he does not have access to.
Analyzing pharmaceutical company drug updates and data can be tricky, and as you can tell, it can become complicated. However, there has been some positive news for the company recently.
SAVA Stock News
To keep up to date with the latest news surrounding Cassava Sciences, you can add the stock to your watchlist. You can also view the latest news for SAVA below.
- On August 25, Cassava shares plunged after a former SEC lawyer, Jordan Thomas, now of Labaton Sucharow, filed a Citizen Petition questioning the company’s Alzheimer’s study data.
- The company issued a response not long after, saying that the claims made were false and misleading.
- In early September, Cassava CEO Remi Barbier again addressed the allegations, saying that the law firm represented clients who have a short position in SAVA stock and that there is “an enormous profit motive at work.”
- A couple of weeks ago, Block & Leviton announced that a class action lawsuit had been filed against Cassava Sciences for potential securities law violations, again relating to the allegations made by the law firm.
- Moving away (slightly) from the drama of the data allegations, the latest news from Cassava is the announcement of data from its pre-planned 12-month analysis of simufilan.
How to Buy SAVA Stock
If you already have a brokerage account and stock portfolio, you can log into your account and buy SAVA shares the same way you would any other stock. However, if this is not the case you will need to create a new account. Follow these steps.
Find a brokerage.
A brokerage operates as the intermediary between yourself and the stock exchange. Customers place orders, either buying or selling stocks, and the broker executes the order. For example, If you want to buy 50 shares of a company such as Cassava Sciences, the broker will execute the trade for you, although they will charge a fee in the process. Brokerage fees vary depending on the broker you choose and the account type you hold.
Make sure you choose a broker that is regulated and best suits your trading. Alternatively, continue further down this page to view the best brokers for SAVA stock.
Calculate the number of shares to buy.
Now that you have found a broker that is best for you, you must fund your account and evaluate the number of shares you wish to purchase. This depends on the risk you want to take and the amount of cash in your account.
Some investors prefer to make a one-off purchase for the total amount of shares in one go. However, others tend to buy a small amount and continuously purchase more as the stock grows in price. The way you enter the market can be vital, and it’s important to research and understand what is best for you then make a plan for all potential scenarios.
Pick an order type.
Now you have your funded account and know the number of shares you want to purchase, the next step is to decide which order type you use.
Market orders allow you to purchase the shares at the current price. This ensures that it is more than likely your order will be filled.
Limit orders allow you to pick the price you wish to purchase the stock. However, there is no guarantee the stock price will reach your desired level and your order may not be filled. Nevertheless, limit orders do offer the benefit of buying the stock at your preferred price.
Click Buy and submit.
Your research is done, you have completed all the previous steps, which means all that is left to do is click submit on your trade ticket. The broker will notify you that your trade is filled and you can manage and track your position by checking your account.
Best Online Stock Brokers for SAVA Stock
As mentioned earlier, different brokers will charge different fees depending on your account type and the broker you invest with. Below is a list of the best brokers for SAVA stock.
SAVA on Benzinga Pro
Screenshot taken from Benzinga Pro on 09-22-2021
As you can see in the chart, Cassava’s share price has been on the decline since late July, but its stock fell even further after the Citizen Petition news at the end of August.
Its shares have been hovering just above the oversold level on the RSI. Even though its shares have continued to decline recently, traders using the RSI on the daily chart have not seen Cassava shares fall into oversold territory for some time.
Price is also firmly below the 50 moving average. With the current technicals not suggesting there will be an opportunity to buy SAVA stock soon, traders and investors will be looking for any significant news to give the company’s shares a lift.
A Tough Sell
Cassava finds itself in a tough situation. Whether the data integrity accusations were made on behalf of short-sellers is unknown, but it has done enough to spook investors. Even after Barbier’s second statement came out, a tweet from scientist Elisabeth Bik claimed the company had removed a treatment group from its data.
Investors should watch Cassava’s upcoming news releases closely.
Frequently Asked Questions
What does Cassava Sciences do?
Cassava Sciences is a clinical-stage biotechnology company developing an approach to treat and detect Alzheimer’s disease. Its lead therapeutic product candidate, used to treat Alzheimer’s, is called simufilam.
Will SAVA stock go up?
When assessing the current fundamental and technical analysis for the stock, it is hard to see a bull case for the stock right now. However, investors should look out for any potential news releases that could address the data integrity allegations.