Cassava Sciences Stock Plummets 25% on FDA Clinical Hold
The FDA has halted the trial of simufilam for epilepsy, the same drug previously at the center of the company's failed Alzheimer's program.
Shares of Cassava Sciences Inc. (NASDAQ: SAVA) plunged more than 25% in morning trading after the company disclosed that the U.S. Food and Drug Administration (FDA) has placed its planned epilepsy trial on a full clinical hold. The stock fell to approximately $2.13, erasing over $47 million in market value and bringing the company's total market capitalization to around $142 million.
The clinical hold affects the company's lead drug candidate, simufilam, which was set to be studied for the treatment of epilepsy related to Tuberous Sclerosis Complex (TSC). According to a company statement, the FDA is requiring additional preclinical data and modifications to the trial's protocol before the study can proceed. This setback indefinitely pushes the trial's start date, which was previously anticipated in the first half of 2026.
This latest development adds another chapter to the troubled history of simufilam. The drug was the centerpiece of Cassava's high-profile Alzheimer's disease program, which was discontinued in late 2024 following significant controversy. The Alzheimer's program was marred by allegations of data manipulation and scientific misconduct, which sparked federal investigations and intense scrutiny from the scientific community. The ultimate failure of its Phase 3 Alzheimer's trials sent the company's valuation spiraling and severely damaged its credibility.
After shuttering the Alzheimer's program, Cassava aimed to repurpose simufilam, its primary asset, for other neurological conditions. The epilepsy trial represented a key part of this pivot and a chance for the Austin-based biotechnology firm to regain momentum. However, the FDA's decision to halt the study now casts a significant shadow over the drug's viability and the company's future.
Cassava Sciences, like many clinical-stage biotech firms, does not generate revenue and its valuation is almost entirely dependent on the future potential of its drug pipeline. With negative earnings per share and a history of clinical setbacks, investor confidence has been severely tested. The firm confirmed the clinical hold in a regulatory filing, which detailed the FDA's requests but provided no definitive timeline for resolution. According to one report, the company had positioned the epilepsy study as a critical next step after its prior clinical failures.
The market's reaction reflects deep skepticism about the path forward for simufilam. A clinical hold is a serious measure imposed by the FDA when a study's design or safety is in question. For Cassava, it represents a major obstacle to its strategy of finding a new purpose for its beleaguered lead compound. Investors are now faced with the prospect of further delays and uncertainty for a company whose lead asset has been repeatedly challenged by regulators and scientific reviewers.